Realistic target definition minimizes vacancy rates and secures value potential
In an increasingly demanding market environment, professional rental management is a decisive factor in the economic success of real estate. Sufficient and reliable cash flow in the form of rent is a prerequisite for financing. Commercial real estate projects usually do not come to fruition without a high pre-letting rate, and even in rental apartment projects, forward deals without pre-letting are no longer in demand.
Asset and property managers as well as external brokers are often involved in the leasing process at the same time. If their roles are not clearly defined, this often results in delayed leasing processes, inconsistent market approaches, and vacancies. Four real estate experts discussed the structures required to successfully lease properties during the online panel discussion "Konfliktfeld Vermietung" (Conflict Area: Leasing) from the series "Asset- und Property-Management konkret" (Asset and Property Management in Practice).
At the invitation of Rueckerconsult, Jürgen Hau, Managing Director of INDUSTRIA Immobilien, Sascha Nöske, CEO of STRATEGIS, Martin Schubert, Head of Letting Management Berlin at HIH Real Estate, and Stephan Wege, Head of Office Letting NRW at Colliers, exchanged experiences, typical points of friction, and approaches to solutions throughout the entire letting process.
Rules of the game instead of turf wars
The panelists identified unclear communication and decision-making structures as the main cause of many conflicts. Too many contact persons, parallel coordination, and a lack of centralized external communication often led to misunderstandings and delays. Successful letting projects, on the other hand, were characterized by clearly defined roles, fixed contact persons, and coordinated decision-making processes—without falling into rigid standard processes.
While asset managers define the strategic guidelines, property managers and brokers are operational letting specialists. Fund and investment managers or the owners themselves are often also involved. If there is a lack of clear responsibilities and common objectives, conflicts can arise – for example, between rapid full letting and long-term sustainable leases.
It is particularly important to establish agreement on responsibilities and objectives with all parties involved at the outset of a letting project. This includes, among other things, determining rent price ranges, terms, investment frameworks, and the handling of incentives such as rent-free periods or fit-out subsidies.
Long-term successful leasing takes time
Jürgen Hau, managing director of INDUSTRIA Immobilien, which manages around 24,000 residential units nationwide, points out that the desire for quick leasing in new buildings is often not feasible and not always sensible.
Even the Berlin rental market, which is characterized by a shortage of living space, is not a sure-fire success, according to Sascha Nöske, CEO of STRATEGIS. "We are commissioned with the initial leasing of large new construction projects. Here, we often have to lease between 100 and 400 units at once. It is important to be quick, because the client's requirement is that there should be no remaining vacancies by the time construction is completed. This higher-priced rental segment has great similarities with the sale of condominiums."
It is also important to avoid asymmetric leasing in new residential buildings.
Residential rentals with scaling potential, commercial rentals require intensive consultation
It became clear that although residential and commercial rentals differ in their structures, their goals are comparable: maximum rental income and minimum vacancy rates. While the small-scale residential segment is easier to scale in terms of rentals, commercial rentals are more strongly influenced by individual user requirements, space concepts, and long-term strategic considerations. While residential property in metropolitan areas has generally been a landlord's market for years, the commercial sector is increasingly shifting from a landlord's market to a tenant's market – with significantly longer marketing times.
"Our work has become much more consulting-intensive," reports Stephan Wege from the real estate agency Colliers. In the past, it was mainly about pure marketing. Now we see ourselves more as a sparring partner for the owner, where it's also about developing strategies together, weighing up risks, and identifying scenarios. Landlord representation, where we represent the owner or asset manager strategically and operationally throughout the entire leasing process, is increasingly in demand."
Leasing manager Martin Schubert from HIH Real Estate adds: "The toughest competition for new leases is the leasing of existing commercial properties. Leasing existing properties does not generate large rent increases, but there are no brokerage fees or incentives. In addition, the risk of vacancy and renovation times are lower. The question of whether to focus on new leases or lease extensions should be clarified in advance with all parties involved."
Sustainability aspects remain important in leasing
ESG issues also remain relevant in leasing management. "ESG is at the top of the agenda for large corporations and is here to stay," Stephan Wege is certain. "The issue of green leases plays a major role for large corporations. For smaller companies, it is more of a secondary concern. The focus there is on ancillary costs or, for example, e-charging stations."
When INDUSTRIA purchases and places projects, ESG is always a major issue. "The tension then lies in energy purchasing, because this is how you can make the second rent as attractive as possible," explains INDUSTRIA Managing Director Jürgen Hau. "We bundle larger portfolios, order energy on a larger scale, and can thus also purchase corresponding green electricity components. This is an important issue for tenants."
In the residential sector, stable and affordable ancillary costs are becoming increasingly important, as the discussion made clear. Digital rental processes, structured data rooms, and transparent documentation are increasingly becoming the norm—not least to ensure speed and quality in a highly competitive market.
